Bill Text: NJ A4551 | 2012-2013 | Regular Session | Introduced
Bill Title: Eliminates unemployment tax for certain workers ineligible to receive unemployment benefits.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-12-16 - Introduced, Referred to Assembly Labor Committee [A4551 Detail]
Download: New_Jersey-2012-A4551-Introduced.html
Sponsored by:
Assemblyman RONALD S. DANCER
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Eliminates unemployment tax for certain workers ineligible to receive unemployment benefits.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain worker contributions to the unemployment trust fund and amending P.L.1971, c.346.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 4 of P.L.1971, c.346 (C.43:21-7.3) is amended to read as follows:
4. (a) Notwithstanding any other provisions of the "unemployment compensation law" for the payment of contributions, benefits paid to individuals based upon wages earned in the employ of any governmental entity or instrumentality which is an employer defined under R.S.43:21-19(h)(5) shall, to the extent that such benefits are chargeable to the account of such governmental entity or instrumentality in accordance with the provisions of R.S.43:21-1 et seq., be financed by payments in lieu of contributions.
(b) Any governmental entity or instrumentality may, as an alternative to financing benefits by payments in lieu of contributions, elect to pay contributions beginning with the date on which its subjectivity begins by filing written notice of its election with the department no later than 120 days after such subjectivity begins, provided that such election shall be effective for at least two full calendar years; or it may elect to pay contributions for a period of not less than two calendar years beginning January 1 of any year if written notice of such election is filed with the department not later than February 1 of such year; provided, further, that such governmental entity or instrumentality shall remain liable for payments in lieu of contributions with respect to all benefits paid based on base year wages earned in the employ of such entity or instrumentality in the period during which it financed its benefits by payments in lieu of contributions.
(c) Any governmental entity or instrumentality may terminate its election to pay contributions as of January 1 of any year by filing written notice not later than February 1 of any year with respect to which termination is to become effective. It may not revert to a contributions method of financing for at least two full calendar years after such termination.
(d) Any governmental entity or instrumentality electing the option for contributions financing shall report and pay contributions in accordance with the provisions of R.S.43:21-7 except that, notwithstanding the provisions of that section, the contribution rate for such governmental entity or instrumentality shall be 1% for the entire calendar year 1978 and the contribution rate for any subsequent calendar years shall be the rate established for governmental entities or instrumentalities under subsection (e) of this section.
(e) On or before September 1 of each year, the Commissioner of Labor and Workforce Development shall review the composite benefit cost experience of all governmental entities and instrumentalities electing to pay contributions and, on the basis of that experience, establish the contribution rate for the next following calendar year which can be expected to yield sufficient revenue in combination with worker contributions to equal or exceed the projected costs for that calendar year.
(f) Any covered governmental entity or instrumentality electing to pay contributions shall each year appropriate, out of its general funds, moneys to pay the projected costs of benefits at the rate determined under subsection (e) of this section. These funds shall be held in a trust fund maintained by the governmental entity for this purpose. Any surplus remaining in this trust fund may be retained in reserve for payment of benefit costs for subsequent years either by contributions or payments in lieu of contributions.
(g) Any governmental entity or instrumentality electing to finance benefit costs with payments in lieu of contributions shall pay into the fund an amount equal to all benefit costs for which it is liable pursuant to the provisions of the "unemployment compensation law." Each subject governmental entity or instrumentality shall require payments from its workers in the same manner and amount as prescribed under R.S.43:21-7(d) for governmental entities and instrumentalities financing their benefit costs with contributions. No such payment shall be used for a purpose other than to meet the benefits liability of such governmental entity or instrumentality. In addition, each subject governmental entity or instrumentality shall appropriate out of its general funds sufficient moneys which, in addition to any worker payments it requires, are necessary to pay its annual benefit costs estimated on the basis of its past benefit cost experience; provided that for its first year of coverage, its benefit costs shall be deemed to require an appropriation equal to 1% of the projected total of its taxable wages for the year. These appropriated moneys and worker payments shall be held in a trust fund maintained by the governmental entity or instrumentality for this purpose. Any surplus remaining in this trust fund shall be retained in reserve for payment of benefit costs in subsequent years. If a governmental entity or instrumentality requires its workers to make payments as authorized herein, such workers shall not be subject to the contributions required in R.S.43:21-7(d).
(h) Notwithstanding the provisions of the above subsection (g), commencing July 1, 1986 worker contributions to the unemployment trust fund with respect to wages paid by any governmental entity or instrumentality electing or required to make payments in lieu of contributions, including the State of New Jersey, shall be made in accordance with the provisions of R.S.43:21-7(d)(1)(C) or R.S.43:21-7(d)(1)(D), as applicable, and, in addition, each governmental entity or instrumentality electing or required to make payments in lieu of contributions shall, except during the period starting January 1, 1993 and ending December 31, 1995 and the period starting April 1, 1996 and ending December 31, 1998, require payments from its workers at the following rates of wages paid, which amounts are to be held in the trust fund maintained by the governmental entity or instrumentality for payment of benefit costs: for the calendar year 1999, 0.05%; for each calendar year from 2000 to 2002, and the period from January 1, 2003 to June 30, 2004, 0.10%; and each fiscal year thereafter, 0.30%.
(i) Notwithstanding the provisions of this section or any other law to the contrary, worker contributions to the unemployment trust fund with respect to wages paid by the State, or any of its instrumentalities or any political subdivisions thereof, shall not be collected or withheld from any individual that performs services excluded from the definition of "employment" pursuant to R.S.43:21-19(i)(1)(D)(iii).
(cf: P.L.2003, c.107, s.5)
2. This act shall take effect immediately.
STATEMENT
This bill prohibits employee contributions to the unemployment trust fund from certain employees employed by the State, or any instrumentality or political subdivision of the State, who are ineligible to receive unemployment benefits. The State's "unemployment compensation law," R.S.43:21-1 et seq., requires employees to contribute a percentage of their wages towards financing the costs of providing unemployment benefits pursuant to the law.
Individuals that perform certain services in employment are excluded from coverage under the "unemployment compensation law," and therefore are not eligible to receive unemployment benefits. This bill explicitly prohibits contributions to the unemployment trust fund by employees who are ineligible to receive unemployment benefits, and are in the employ of a governmental entity in this State, in the following capacities: an elected official, a member of a legislative body, a member of the judiciary, a member of the State National Guard or Air National Guard, an employee working on a temporary basis in case of a natural disaster, and an employee working in a position designated as a major nontenured policy making or advisory position.
Currently, employees performing services in employment in a capacity listed above are excluded from coverage and are not eligible to receive unemployment benefits. The bill amends the "unemployment compensation law" to explicitly state that contributions to the unemployment trust fund will not be collected or withheld from these employees.
